Regarding operation’s report of Khukh Gan JSC

  

Khukh Gan JSC plans to put its Direct Reduced Iron Plant into operation within the first ten days of this July and the preparatory works to complete the plant project have nearly done.

1.   The company reached an agreement with local government of Saikhan Sum (district) of Bulgan Province to purchase coal from Saikhan Ovoo coal mine. Since the agreement, the company has collected more than 2000 tons of coal at the project site and the coal is still being delivered to the project site from Saikhan Ovoo coal mine at the moment.

2.   A coal to fuel gas furnace at the plant is to be taken from coal mine near Ereen City, border city between Mongolia and China and Ilchit Metal LLC has signed the contract to deliver the coking coal from Ereen City to the plant for Khukh Gan JSC. So far, 300 tons of coking coal delivered at the project site. In order to make adjustment for the gas furnace, we invited gasification expert from China who is currently working at the project site.

3.   We brought over 3000 tons of iron ore concentrate which is main raw material for the plant to the project site from Iron Ore Concentrating Plant at Arkhangai Province.

4.   500 tons of limestone, another raw material, has delivered at the project site for the first stage of production. We made a contract with Metal Industrial LLC to crash the limestone and this company has already started crashing the limestone.

5.   Some supplement works including interior decoration of office building of the plant, workers’ cafeteria, bath-house, restrooms, its plumbing works, cloth changing room, resting rooms and outside decoration of the plant have nearly completed.

Any shareholder who wants to see the project site can have a trip to the plant at any time.